Waukesha County Home

(StatePoint) — Life's unex- pected challenges can make meeting monthly mortgage payments difficult. The good news? Help is available to avoid foreclo- sure. Indeed, Freddie Mac has completed more than 255,000 foreclosure prevention actions in 2021, according to the Federal Housing Finance Agency. Whether you're currently behind on payments or foresee trouble ahead, Freddie Mac advises tak- ing the following steps as quickly as possible to get back on track: Assess your situation Whether it's due to unem- ployment, illness, natural disaster or other reasons, identifying the cause of your financial hardship and anticipating its duration are important. These factors can help determine the best solution for you. (A short- term hardship is over with- in 12 months. A long-term hardship extends beyond 12 months.) Contact your servicer Your servicer — the com- pany where you send mort- gage payments — is your best resource throughout the process. They will pro- vide you with the available mortgage relief options based on your particular sit- uation, which typically begins with being placed in a temporary forbearance program. Remember, your servicer is there to help. If you think you're going to have trouble paying your mortgage, don't wait. Call them immediately! And if you're already behind on your mortgage or currently in a workout option, respond to their outreach efforts to keep an open dialogue going throughout the process. Know your options No matter where you stand, there are solutions. Here are some to consider: ■ Forbearance is an agree- ment between you and your loan servicer that either pauses or reduces monthly mortgage payments for a limited time. Consider for- bearance if you're currently unable to make payments but think you'll be able to resume soon. ■ With payment deferral, missed mortgage payments move to the end of your loan term, but your monthly mortgage payment amount stays the same. Consider payment deferral if your hardship is resolved but you're unable to repay missed mortgage payments as a lump sum or by increas- ing monthly payments. Freddie Mac Flex Modifica- tion, for example, provides up to a 20% mortgage pay- ment reduction that perma- nently changes one or more of the original terms of your mortgage, such as the interest rate and mortgage term. Ask your loan servicer whether this may be an option for you. ■ A repayment plan increases mortgage pay- ments for a short period to make up for missed pay- ments. Plans must be longer than one month but no longer than 12 months. Con- sider this option if you can afford your regular monthly payment, plus a little more, for a short period. ■ With partial reinstate- ment, you pay a portion of missed mortgage payments as a lump sum. To pay off the rest, your loan servicer works with you to create a repayment plan. ■ With full reinstatement, you pay the total owed mort- gage payments as a lump sum, making your mortgage current. This is a good choice if you can afford it. ■ Refinancing your mort- gage lowers your interest rate or replaces an adjustable-rate mortgage with a more affordable fixed- rate mortgage. This is a good choice if you're current on payments but would benefit from reduced payments in the future. This year, more than 600,000 homeowners with a Freddie Mac-backed mortgage refinanced into a more affordable loan. ■ COVID-19 relief is offered by many loan ser- vicers to those struggling due to the pandemic. ■ Of course, if homeown- ership is no longer afford- able or desirable, there are options too. Short sale and deed-in-lieu, for example, can help you exit your home without facing the costs associated with foreclosure. For more homeowner resources, visit My Home by Freddie Mac at myhome.freddiemac.com. If you're struggling to make mortgage payments, take action quickly. Doing so can help you prevent foreclo- sure and stay in your home. What homeowners facing hardship can do Tips to avoid foreclosure when things get tight and missed payments loom (c) Ridofranz / iStock via Getty Images Plus If finances are tight, homeowners need to know their options and the impact they carry. HOME DECEMBER 2021 8

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